HCMC – The Ministry of Finance has released a draft decree amending Decree 65 on bond trading, proposing a one-year delay of putting the said decree into force.
In its proposal, the ministry suggested that Decree 65 should take effect from January 1, 2024, as the bond market is in a liquidity crisis. The delay would give the market more time to adapt to the new regulations and, at the same time, enable professional individual investors to maintain their trading.
It also asked the Government to postpone requirements on credit rating as prescribed by the decree until early 2024 as it would take time and money to carry out compulsory credit rating, especially after a market crash, the ministry explained.
Meanwhile, it added a new regulation, which allows debt-issuing organizations to revise the tenor up to two years compared to the original term written in the plan for issuing bonds to the public and using proceeds from bond sales.
The ministry said such a regulation would help bond issuers obtain funding for business and production activities and refinancing debts under the current bond market situation, thereby relieving the financial burden on them as a huge volume of bonds will fall due in the next two years.
In addition, the draft decree allows bond issuers and buyers to negotiate and convert the principal and coupons into borrowing or other types of assets.
This year, corporate bond issues ground to a halt due to recent upheavals on the market and scandals dampening investor confidence.
Bonds offered to the public stood at VND134,800 billion in the first quarter of the year and then halved in the third quarter, at VND65,900 billion. From mid-September, when Decree 65 took effect, to late November, new bond issues plunged to some VND7,000 billion.
Meanwhile, premature bond redemption in the year through October had soared by 50% year-on-year to VND122,500 billion.
Decree 65 tightened control over bond sales by requiring professional individual investors to hold an investment portfolio worth at least VND2 billion for 180 days or longer and debt-issuing organizations to report on their credit rating results.
